Bitcoin active addresses 'concern' analyst despite 50% BTC price gains

CointelegraphPublished on 2023-02-21Last updated on 2023-02-21

Abstract

Bitcoin lacks both active address growth and significant on-chain volume in a divergence from previous BTC price bull markets.

Bitcoin still lacks the on-chain volume and active address increases which characterize bull markets, research warns.

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In a frank appraisal of the 2023 BTC price rebound, on-chain analytics platform CryptoQuant warned that Bitcoin may be weaker than it seems.

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Active addresses not copying bull market paradigm

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As on-chain metrics flip green and some even flash bull signals not seen in years, a healthy dose of suspicion remains among many analysts.

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CryptoQuant contributor Yonsei_dent is among them, writing in one of the platform’s Quicktake blog posts this week that 2023 does not chime with previous bull markets.

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The problem, he explains, lies in active addresses, which are not increasing in number despite BTC/USD gaining almost 50% year-to-date.

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“Active Addresses is a metric that includes all addresses sending and receiving BTC, providing a look at how active market demand is,” the blog post reads.

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“The ‘price’ of an asset is determined by the laws of supply and demand in the market. Crypto markets are no exception. For asset prices to rise, market interest and demand must be supported.”

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An accompanying chart shows the 30-day moving average (MA) of active addresses increasing following the end of the 2018 bear market and the March 2020 COVID-19 cross-market crash. 2023, by contrast, has yet to produce the same trend.

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“You can see that Active Addresses (30DMA) increased both during the 2019 bull market turnaround and when coming out of the 2020 COVID-19 shock,” Yonsei_dent added.

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“I am concerned that this 2023 rally did not show any rise in Active Addresses.”

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Bitcoin active addresses annotated chart (screenshot). Source: CryptoQuant

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Many transactions, not much volume

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Other research this week produces similar conclusions about the Bitcoin investor habits, which have accompanied the return to $25,000.

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On-chain volume, analytics firm Glassnode notes, remains low, and both long-term holders (LTHs) and short-term holders (STHs) are reluctant to spend.

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“Despite net growth in on-chain activity, and an ATH in total UTXOs, transfer volumes are remarkably subdued, both for Long and Short-Term Holders,” it wrote in the latest edition of its weekly newsletter, “The Week On-Chain.”

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Bitcoin spent young coin volume annotated chart (screenshot). Source: Glassnode

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There are some encouraging signs of sentiment improving, however, with coins sent to exchanges by LTHs now mostly being done so in profit.

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In mid-January, Glassnode shows, 58% of LTH coins sent to exchanges were moved at a loss, while at the start of this week, the figure was just 21%.

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Bitcoin relative long-term holder realized loss to exchange annotated chart (screenshot). Source: Glassnode

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What is $BITCOIN

DIGITAL GOLD ($BITCOIN): A Comprehensive Analysis Introduction to DIGITAL GOLD ($BITCOIN) DIGITAL GOLD ($BITCOIN) is a blockchain-based project operating on the Solana network, which aims to combine the characteristics of traditional precious metals with the innovation of decentralized technologies. While it shares a name with Bitcoin, often referred to as “digital gold” due to its perception as a store of value, DIGITAL GOLD is a separate token designed to create a unique ecosystem within the Web3 landscape. Its goal is to position itself as a viable alternative digital asset, although specifics regarding its applications and functionalities are still developing. What is DIGITAL GOLD ($BITCOIN)? DIGITAL GOLD ($BITCOIN) is a cryptocurrency token explicitly designed for use on the Solana blockchain. In contrast to Bitcoin, which provides a widely recognized value storage role, this token appears to focus on broader applications and characteristics. Notable aspects include: Blockchain Infrastructure: The token is built on the Solana blockchain, known for its capacity to handle high-speed and low-cost transactions. Supply Dynamics: DIGITAL GOLD has a maximum supply capped at 100 quadrillion tokens (100P $BITCOIN), although details regarding its circulating supply are currently undisclosed. Utility: While precise functionalities are not explicitly outlined, there are indications that the token could be utilized for various applications, potentially involving decentralized applications (dApps) or asset tokenization strategies. Who is the Creator of DIGITAL GOLD ($BITCOIN)? At present, the identity of the creators and development team behind DIGITAL GOLD ($BITCOIN) remains unknown. This situation is typical among many innovative projects within the blockchain space, particularly those aligning with decentralized finance and meme coin phenomena. While such anonymity may foster a community-driven culture, it intensifies concerns about governance and accountability. Who are the Investors of DIGITAL GOLD ($BITCOIN)? The available information indicates that DIGITAL GOLD ($BITCOIN) does not have any known institutional backers or prominent venture capital investments. The project seems to operate on a peer-to-peer model focused on community support and adoption rather than traditional funding routes. Its activity and liquidity are primarily situated on decentralized exchanges (DEXs), such as PumpSwap, rather than established centralized trading platforms, further highlighting its grassroots approach. 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Note: This report encompasses synthesised information available as of October 2023, and developments may have transpired beyond the research period.

363 Total ViewsPublished 2025.05.13Updated 2025.05.13

What is $BITCOIN

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